While approving privatisation of another three public sector entities, the Privatisation Commission on Wednesday decided not to privatise the financially-troubled Pakistan Steel Mills (PSM) till its restructuring, as investors might hesitate to purchase it under current circumstances.
The meeting of board of directors, which met under the chair of its chairman/ Minister of State for Privatisation Commission Mohammad Zubair, has approved the privatisation of another three public sector entities. The entities included two Discos (Fesco and Lesco) and one Genco (TPS MuzaffarGarh 1350 MW). The meeting has also decided to initiate the process for hiring of services of Financial Advisors (FAs) for the above-mentioned Public Sector Entities, for its privatisation.
Sources said that privatisation of PSM was not on the agenda of the meeting. However, it decided to go for its privatisation after starting its restructuring. “The government is working on restructuring of Pakistan Steel Mills, which is in worst position as running only at three percent of its capacity.
The privatisation of Pakistan Steel Mills is difficult task as we have to take its employees on board”, said Mohammad Zubair while talking to The Nation. He further said that he would take the restructuring plan to Karachi to discuss with the management of PSM in one month.
Minister of State for Privatisation Commission made it clear that government could not wait for complete restructuring that might take more than two years time. Once, the restructuring started, we would offer it for privatisation, he said added, “The privatisation of PSM and restructuring will go parallel”.
Meanwhile, the Board directed the Privatisation Commission to reconstitute the panel of lawyers for Privatisation Commission and approved the enhanced fee structure for the lawyers. Board Members including Arsala Khan Hoti, Nasiruddin Ahmad, Zafar Iqbal Sobani, Farooq Khan, Zafar Iqbal and Secretary Privatisation Commission Amjad Ali Khan attended the meeting.
The government is expecting to generate Rs 150 billion through the privatisation of different entities during ongoing financial year 2013-14. The board of directors of privatisation in early January 2014 had approved the disinvestments of eight entities.
The eight entities include Pakistan International Airlines (PIA), Oil and Gas Company Limited (OGDCL), Habib Bank Limited (HBL), United Bank Limited (UBL), Allied Bank Limited (ABL), Pakistan Petroleum Limited (PPL), National Power Construction Company (NPCC) and Heavy Electrical Complex. The authorities are estimating a minimum Rs80 billion gains from 10 percent sale of OGDCL shares, Rs20 billion by offloading 5 percent shares of Pakistan Petroleum Limited, Rs15 billion from 10 percent shares of Untied Bank Limited, Rs50 billion by offloading 20 percent shares of Habib Bank Limited and Rs10 billion by offloading 10 percent shares of Allied Bank Limited.